Tone Vays: Everything Except Bitcoin Is A Pure Speculation

On the Blockchain and Bitcoin Conference in Kiev, Blockspoint has managed to get an interview with the trader and market analyst Tone Vays and discuss peculiarities of the cryptocurrency market. It was not easy to reach Tone, as the number of media and community members craving to talk to him was enormous.

That was not totally surprising though. Not only is Tone Vays a content maker for a popular YouTube channel and an experienced crypto trader, who worked on Wall Street for 10 years, but also Vice President at JP Morgan Chase and the creator of the CryptoScam podcast and the ToneVays.com website. Today he runs great trading workshops, and thousands of people from all over the globe bombard Tone with emails asking for bitcoin price predictions.

Tone made a cryptocurrency rate forecast exclusively for Blockspoint’s readers, explained why altcoins are scams, and gave some pieces of advice on the best trading strategy in the current market conditions.

Bitcoin will likely meet the bottom

Today everyone is waiting for bitcoin price to jump greatly. These people are too optimistic. The rates are suggesting that bitcoin has been in trouble since the mid-January. I still expect prices to continue the dip as they might go below $5000 within a current year. The pullback is annoying but, as a part of a larger cycle, it is a necessary process. It took the Nasdaq 15 years to make it back to the top of the bubble of 2000th. Just like that, bitcoin rate might take a couple of years to get back to its ultimate highs, while the technology gets stronger and more people continue to use it.

Bitcoin can possibly reach its bottom in November/December of 2018. But after this process completes, it may rise above $20,000. We have seen that it took a while until bitcoin reached $1000, but then it jumped from $1000 to $20,000 within a single year. I think the best trading strategy is to wait as it is too risky to buy bitcoin right now. I always tell people, if you want to buy BTC coins and hold them for 5-10 years, the best time was yesterday. But if you are an intermediate or a short-term trader I would recommend to wait. Patience is the most important skill of a trader.

There is no point to rely on the news making prognosis because at the time when something hits the news, it is already too late. So you have to adjust to it and follow the rate dynamics. Also, I do not believe that the market is manipulated. People complain about manipulations when they lose money on a trade. But in fact, manipulation is, let's say, when a government entity prints money to boost the economy, or when a company hides certain information to keep stock prices, or when an exchange purposely changes the price. A guy with a lot of money placing a large bet is not a manipulation. It is just the guy with a lot of money who moves the market.

I am not a fundamental analyst but a technical analyst. Still, this does not mean I have not done all the necessary fundamental analysis I needed in the world of cryptocurrencies. If you want to be able to predict rate changes, you have to follow common financial rules as everything that happens to cryptocurrencies has happened during hundreds of years on traditional markets. The same volatility exists on the stock market, the futures are very highly leveraged. The main difference between cryptocurrency trading and traditional trading is that it is available to poor people, who have about $1000-5000, and to young people, who are 12-15 years old.

All we need is Bitcoin

The world needs Bitcoin. Bitcoin does not belong to anyone, it is harder than gold, more secure and will become more liquid and faster after the Lightning Network is launched. I think those people, who say that bitcoin is not able to scale, have been living in a cave since November 2017. I think bitcoin is scaling amazingly well. I have been sending unreasonably cheap bitcoin transactions for the last six months, and I don't think bitcoin even needs scaling.

Those problems were in December when there were massive cowardly made attacks against Bitcoin in order to prevent it from adapting the latest code which would help it to scale. Once we got Segregated Witness into the code, Bitcoin has become very cheap and fast. And it scales well enough for its current usage.

Bitcoin has proved itself in real cases. I first heard about Bitcoin in 2011, when WikiLeaks was cut off from financing by Visa, MasterCard, and PayPal. And they had to almost shut down their operations. But it was not for Bitcoin payments. I found out that Bitcoin was a great use case, people could donate coins to keep WikiLeaks alive so that the website could still provide the truth about the government's misdeeds. I did not buy bitcoin back then. I just found it interesting. I finally bought BTC coins when I saw what happened in Cyprus in April, 2013. Cyprus banks were shut down and 50% of above €100,000 was confiscated. And that was the moment when I started taking Bitcoin seriously. I realized that if I had held my money in BTC it would have not been confiscated

I absolutely fell in love with Bitcoin in summer of 2015, when Greek banks were shut down and people were allowed to withdraw €60 a day from ATMs. And when the banks opened three weeks later, they allowed to withdraw only €4000 a week. All these events made Bitcoin relevant to me. And I continue to explain why Bitcoin is dominant in the global financial sphere.

Why people treat Bitcoin in a wrong way

The problem is that people use bitcoins for small payments with a few satoshis per transaction. All these small transactions are filling blocks as only about seven transactions per second are available. Half of the world’s amount of active miners do not check the blocks. The block size is about 1 MB, so they have to spend several seconds on validation while the equipment can use this time for validating a new block instead. Miners would have to spent more time if there would be 2 MB per block and it would be very difficult to attract them to this. There is only 1 MB and we have to live with it.

Miners all over the world are in a rush. But they have to understand that mining is not a lottery and their purpose is sustaining of the system, not money making. Miners are very important for decentralization. Of course, there are huge corporations which produce equipment like Bitmain. But today there are many alternatives, such as Halong Mining or Avalon. The problem is that big companies are always seeking to centralize the system.

I do not like selling out my bitcoins to companies or persons who try to instantly exchange cryptocurrency for fiat. I prefer to find people who are going to hold bitcoins. It is better for the whole network and for owners as they are getting more rich.

Altcoins are expected to be subject to the epic fail

I ignore the existence of altcoins until someone asks me about it. Everything except bitcoin is a pure speculation. Altcoins are even worse than national fiat. They were emitted by companies as attempts to create their own money and get rich with the help of those who cannot contribute positively to the Bitcoin network.

I find everything outside Bitcoin pretty ridiculous. I do not see any innovations coming out of other projects. It is a true generational innovation. Bitcoin is so innovative as the Internet itself. It is going to revolutionize money. Companies which will be able to utilize the Bitcoin blockchain properly will succeed, and I see that all these altcoins and ICOs are failed attempts to recreate Bitcoin.

Stablecoins, futures and derivatives

I am not a fan of stablecoins at all. I think that stablecoins pose a great risk. Especially such cryptocurrencies as Tether. There are a lot of questions on whether Tether is actually backed by dollars or not. If it was discovered that Tether had never been backed by dollars, there would be like a run on a bank. There would be people dumping their Tether at 80 cents on a dollar and rushing back to Bitcoin. On the other hand, if Tether is really backed by the ridiculous number of dollars — something like 10 billions, the government can state that it's used for illegal activity and to take out all those dollars. I think it is a very dangerous situation which will cause a run on Tether. These stablecoins may lead to disaster. However, the disaster is more positive for Bitcoin rather than negative.

Bitcoin futures, derivatives and other products are not very relevant right now. The only good thing with BTC futures is that they have made Bitcoin much more legal. Now when we have BTC futures it is more difficult for the US government to come in and claim that Bitcoin itself is illegal. I don't think there is a reason to trade BTC futures as they are not very useful. I do not see much financial relevance but I see very good acceptance, regulatory and non-criminalization elements that come with the acceptance of bitcoins as legitimate assets. If they launch ETH futures I will be very disappointed and upset. I think that it is a very illegitimate crypto product. And it can be very dangerous.

Photo: Sasha Che

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